Goldman Sachs valuation of Facebook at $50 billion has intensified the spotlight that has been shining on social networks recently. Linkedin, the professional networking site, announced plans for an IPO and an enhancement of the advertising services it currently offers.
Highly targeted advertising represents a huge revenue opportunity for social network operators and for external companies it offers a new and highly personal communication channel with its customers and prospects. This view is reinforced by Deloitte’s 2011 market predictions report that claims 2011 will see social networks break the one billion user mark and deliver two trillion adverts. In light of these predictions, technology professionals and marketers need to explore and pursue a range of techniques that not only help reach a growing audience but hold their attention.
With 600 million users worldwide, Facebook is an alluring and compelling advertising platform. Unlike traditional advertising outlets such as print or television, Facebook is a real-time, fast-moving and constantly changing environment. The ability to pick and chose who you interact with based on common interests or other characteristics, the ease with which one can reach individuals beyond physical borders and geographic boundaries, and the speed with which information can be relayed across groups and individuals has created an advertising platform that is unparalleled.
Facebook’s success is in part a reflection of the changes in society generally and an acknowledgement that individuals are increasingly choosing to interact with others on their terms. Moreover, it’s not enough to simply appeal to an individual’s interests, you need to appeal to their fans as well. For advertisers, this marks a seismic shift in the way they identify and approach potential customers and buyers.
Issues & Approaches
For advertisers considering Facebook, the stumbling block can be the approach and doubts around the potential return. The sheer scope and fluid nature of Facebook can make targeting individuals a daunting prospect. Technology is often touted as the solution but in this instance the technology is pivotal to not only the approach but the success and return of any Facebook advertising programme.
Pushing The Boundaries
With the continued growth in the number of Facebook users, the challenge remains to keep one step ahead. March 2011 saw the number of active Facebook users in the UK pass the 30 million mark. That represents half the population of the UK. The significance of this lies not in the number, impressive though that is, but in the appreciation that as the number of users grows and matures in its outlook and expectations, so gaining their attention becomes ever harder.
There’s no doubt that the advent of Facebook has changed the rules. The question is no longer whether to advertise on Facebook or if the returns can be realised. Instead, the question is how much should one advertise and how best to go about it. Getting face-time from a Facebook audience can be incredibly difficult but an approach based on a solid, flexible technology platform can deliver incredible results.
The key lies in personalising the message in way that resonates with the individual and adapting your message and pitch hundreds of times a minute so that you genuinely appeal to the aspirations, needs and interests on the individual. For this, technology is critical. Our investment in ONE Media Manager allows us to fuse the best aspects of paid search and display advertising to create a structured, managed approach that delivers.
Back in July 2010, Mark Zuckerberg commented that Facebook was almost guaranteed to reach 1 billion users worldwide, provided Facebook continued to innovate and remain relevant. If the current growth rate is any measure, Facebook are certainly on track to achieve this goal.
The fluid nature of Facebook and social networking generally requires technology and marketing professionals to be constantly thinking ahead. Similarly, we recognise that we cannot rest on our laurels either and that we also need to innovate. For us, innovation is driven by anticipation, the anticipation of what might be and how we might best address it.